New York’s computer-monitoring bid to stop over-billing

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The workplace of the future is one in which work done on the computer is overseen by an eagle-eyed monitoring software that can distinguish between legitimate, billable work and the distracting browsing and gaming that might cut into a productive day. That, at least, is the idea promised by TransparentBusiness, the monitoring software company that is leading a nationwide effort to require state government contractors to use billing verification software like its own.

Last month, state Sen. Diane Savino introduced a bill, echoing legislation introduced in 31 other states, that would require certain state contractors to use software to track and verify hours worked on a computer. Both Savino and TransparentBusiness – which has lobbied on this front in Albany and in other states – argue that this type of software has the potential to reduce overbilling by government contractors, and thereby save taxpayers money.

“Trust but verify is a nice slogan to throw around, but when there are hundreds of millions of taxpayer’s dollars at stake we need more,” Savino said in an emailed statement. “(Billing verification software) technology can get it done.” Savino’s bill would require state contractors who are awarded information technology contracts of more than $250,000 billed at an hourly rate to install billing verification software on the computer of each person performing the work. Savino’s bill doesn’t specify TransparentBusiness a vendor.

So far, Savino’s bill carries no co-sponsors and does not have a version in the Assembly. While 32 states have now introduced versions of this legislation, it hasn’t been adopted anywhere. It has advanced the farthest in New Jersey, where it has been passed by the Assembly and two state Senate committees.

Savino’s bill refers to software that would take screenshots of a worker’s computer at least once every three minutes, and which would record keystroke frequency and mouse activity – all of which TransparentBusiness does, and rivals such as Time Doctor record similar metrics. The software works as a timer, so the worker controls when it is recording information and when it is not. At the end of a day, the worker would have a file of screenshots to upload to a secure portal. Screenshots that show work done for the state project are recorded as legitimate time worked, while screenshots that show a worker doing something like checking social media or playing solitaire are not.

TransparentBusiness’ software is based on positive proof, meaning that a worker controls what screenshots are uploaded and is meant to only upload the screenshots that show him working on the state project. The worker is notified whenever a screenshot is taken, and has multiple opportunities to review whether or not he wants to upload it. In other words, if a worker is playing solitaire while the timer is turned on and gets a notification that a screenshot is taken, she wouldn’t want to upload it to the portal because she knows that it wouldn’t be counted as billable time. As Billy Kenny, senior vice president at TransparentBusiness, explained it, the main reason why a screenshot of something like solitaire or social media would show up in the state-accessible portal is because the worker forgot or neglected to delete it before uploading.

It’s easy to see why a state agency or private-sector employer would trust screenshots more than a traditional timesheet.

But since TransparentBusiness began rolling out its lobbying campaign about a year and a half ago, some have raised concerns about risks to privacy and security this software could pose. In late February StateScoop reported, the association representing state chief information officers – typically appointed officials overseeing information technology – released a statement against bills like Savino’s because of the “significant risks to citizen privacy and federal regulatory compliance concerns it could create.”

The statement was a rare move for the National Association of State Chief Information Officers, according to Delaware’s Chief Information Officer James Collins, who serves as president of NASCIO. “I've been a member of NASCIO for almost five years now, and I've never seen NASCIO take a position on a bill,” Collins told City & State. “Our executive director has been in the role for about 15 years, and he also confirmed that this is not a common occurrence, (there have been) less than a handful of times where we even had anything to say about legislation.”

What prompted NASCIO’s sudden outspokenness, Collins said, is a heightened concern for cybersecurity. Every year, he said, NASCIO solicits from its members a list of top concerns, and for the past few years, cybersecurity has topped nearly every list. “When you think about all of the systems across state government that hold some of the most sensitive information about our citizens and businesses located here, it just raised a concern of creating this homogenous repository of that data, that sensitive data,” he said. “When we see legislation that introduces risk – as it relates to cybersecurity – of this magnitude, we couldn't stay silent.”

State contractors working for law enforcement or health agencies for example, could generate screenshots of state residents’ sensitive personal information – and be vulnerable to a security breach. New York’s chief information officer, Robert Samson, did not respond to a request for comment.

Sarah Matz, a director of state government affairs at CompTIA, an information technology association, echoed Collins’ concerns. “It's not possible to take a screenshot and not capture individual and personal data that's unrelated to the contract – everything from medical records, financial transactions and passwords,” Matz said.

Kenny said TransparentBusiness’ software has a solution to some of these concerns. A state agency and contractor can predetermine project-relevant sites that might contain private information – LexisNexis for example – and automatically blur any screenshots, so that all that the state would see is the name of the site and the timestamp. Or, if the worker sees that a screenshot is taken of a page with sensitive or private information, he can choose to delete it. The latter option, however, relies on the worker to take the time to make those distinctions and not accidentally upload screenshots with sensitive information.

Savino’s bill, like the sample legislation provided by TransparentBusiness, specifies that neither the third party software company nor the state agency would have access to any of the screenshots taken on the contractor’s computer. Only when a worker uploads screenshots or the state agency requests screenshots can the state see that information.

While some have criticized the idea that the software will record keystrokes and mouse activity, Kenny specifies that it tracks keystrokes in a binary fashion, meaning it’s the frequency of keystrokes that is recorded, not the specific strokes that could identify what words are being typed. “The idea of counting (keystrokes) and mouse events is to show activity, to show that the person is actually working on the computer,” he said.

Still, this doesn’t pacify critics. “From our perspective, the risks are still there,” Matz said. “There isn't an industry standard regarding the number of keystrokes or mouse events in a given time window, and how that would equate to the amount of work being performed, or that it's the work that is supposed to be performed.”

Asked whether he believes the software contains any risk, Kenny said no. “Honestly, we believe there's not, because the way the software was designed was to protect privacy,” he said. “We understood that that would be a concern, and that's why we built in these ways that you can review.”

Critics have also said this legislation would put an unfair burden on contractors, on whom the bill specifies that the cost of downloading the software would fall. “Vendors would be required to keep an increasing amount of data, and just the volume of the data generated from something like this would be extremely large,” Matz said. “There are also some concerns that this would eliminate small vendors from working with the state, because they won't be able to take on the added security and privacy costs.”

Savino’s bill differs slightly from the sample bill offered by TransparentBusiness with regard to which contractors the law would cover. While the company’s sample legislation uses a threshold of contracts exceeding $100,000, Savino refers to contracts exceeding $250,000. Though Savino was not made available for an interview, she said in a statement that there is major potential for cost savings. “(Billing verification software) could save public money on everything from MTA operating costs, to infrastructure improvements,” Savino said. “Media reports of cost-overruns and government inefficiency are far too common. We’re getting numb to them, but each of those stories means dollars are being wasted, and we’ve got to do what we can to make it stop.”

In delineating the problem of government contractors overbilling states across the nation, TransparentBusiness often refers to one case that hits close to home in New York. In a scheme beginning in the early 2000s, a New York City contractor working on the city’s payroll modernization project called CityTime gained notoriety when it ran up a bill of $700 million for a project that was budgeted for $63 million. The contractor in question, Science Applications International Corporation, eventually agreed to forfeit more than $500 million.

The example is a perfect illustration of a crisis that TransparentBusiness – and Savino’s legislation – could have helped to prevent. “We believe that 99% of the contractors are honest, but those that aren't, they can do this for a number of years,” Kenny said.

But to others, it’s not clear that the problem of overbilling is widespread enough to require this monitoring software. Collins said that in Delaware it hasn’t been a problem. He and Matz both advocated for other methods of verifying that work is done. “We do things like milestone-based statements of work, where we have to accept that milestone has to be done within a certain time, and you have to achieve a certain amount of work and we have to review that and accept it, and then they get paid,” Collins said.

Matz, meanwhile, mentioned that a state could use this software without it being mandated. “If the state wants the technology or wants to track something that has been problematic, that can be done through the (Request for Proposal) process, it doesn't have to be legislated,” she said.

The central question in this fight is whether this legislation is necessary. In fact, the question may be twofold: Is the problem of overbilling significant enough to require billing verification software? And if so, is it necessary to mandate the usage of such software? Critics maintain that through this nationwide legislative push, TransparentBusiness is presenting a solution in search of a problem.

John Kaehny, executive director of the good-government group Reinvent Albany, believes the answer is to the latter, at least, is no. “This is (a) dumb legislative micromanagement bill and should not pass,” Kaehny wrote in an email. “State agencies should be paying for goods and services delivered, not hours worked. (It) would be much better for the Legislature to vastly increase (the) number of oversight hearings they do and get to the bottom of cost overruns – if that is their concern.”

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As founder and research director of the Empire Center for Public Policy, E.J. McMahon is a go-to expert on budget plans and policy proposals. His organization promotes greater transparency, accountability and fiscal responsibility in state government, which often puts him at odds with lawmakers and the governor. McMahon previously worked as a journalist in Albany, as an Assembly Republican staffer and a budget adviser for almost 30 years, giving him great insight into the goings-on in the Capitol.